Nonprofits in Survival Mode
What the 2026 State of Nonprofits Report tells us about burnout, funding, and the need for new strategies
By Starsha Valentine, Partner & Chief Culture Officer
For leaders throughout the nonprofit sector, the findings in the Center for Effective Philanthropy’s State of Nonprofits 2026 Report feel like an affirmation of what they already knew: the sector is feeling the burn in this current environment and are seeking new ways to cope.
Many leaders have spent the last several years navigating multiple crises: COVID recovery, political uncertainty, rising costs, workforce exhaustion, and increasing uncertainty about funding. This extreme has become the default operating mode, which is both challenging and unsustainable.
The report lays out three key themes from the data:
Staff and leadership burnout is at an all time high, with no end in sight
Funding is becoming harder to secure
Organizations are increasingly making strategic decisions to survive
Burnout Is The Number One Challenge Facing Leaders Today
The most urgent finding in the report is that burnout is rising across the nonprofit sector.
Leaders cite physical, mental, and emotional exhaustion fueled by an increasingly volatile political and social climate. Organizations are attempting to meet the rising need for community services while also managing financial instability, low staff morale, and reduced capacity. Many nonprofit staff members are deeply connected to the communities they serve and are often experiencing the same instability, fear, or vulnerability as their constituents. As one leader quoted in the report reflected:
“As fear, uncertainty, and polarization increase in the broader environment, those dynamics do not stop at the organizational door.”
The result is an environment where staff are carrying both professional responsibility and personal impact simultaneously.
Almost 30% of nonprofits reported reductions in staff size, while recruitment and retention become more difficult. The sector has perpetually had difficulty competing with private-sector wages and this has only grown worse in the current environment.
Leaders who identify as LGBTQ+, people of color, or who lead organizations focused on social justice issues reported disproportionately higher threats—from backlash against their mission and legal challenges to concerns for personal safety and even board resignations.
The Funding Environment Has Shifted Dramatically
Burnout is just one side of the equation, funding instability is the other. According to the report respondents, foundation grants are now ranked as the most difficult funding source to secure since January 2025, with federal funding a close second.
For organizations receiving government funding, cuts have been sharp and sometimes devastating. But the impact extends beyond those directly affected; nonprofits without federal dollars are feeling downstream effects as more organizations compete for a shrinking pool of philanthropic resources.
In many communities, this has created a difficult paradox: demand for services is rising at a time when resources are becoming more scarce and difficult to access.
The report also offers an important reminder for philanthropy: as economic instability mounts, recommitting to support the most vulnerable will strengthen community stability. The report in particular cautions funders against abandoning investments in arts, culture, festivals, and the humanities. In moments of collective strain, these are connective tissues that create belonging, foster resilience, and help communities remain human in difficult times.
Nonprofit Leaders Are Leaning Into Adaptability as a Strategic Super Power
The report highlights a growing wave of strategic adaptation. Many organizations are intentionally diversifying revenue streams by applying for new grants, expanding individual donor bases, and exploring collaborative fundraising models. Others are pursuing cooperative partnerships, mergers, and shared infrastructure to reduce duplication and increase sustainability.
Organizations are also making difficult operational decisions. Extreme budgeting, cutting costs, reducing staff, and eliminating overhead wherever possible, has become commonplace.
Technology is beginning to play a role as well, with roughly 20% of nonprofits reporting the use of AI tools to reduce operational costs and streamline administrative work.
Many leaders acknowledged that organizations are surviving because staff are operating at “175 percent.” While this may work in the short term, it is not a viable long-term strategy. A sector built on overextension risks exhausting the very people communities depend on most.
What Can Nonprofits Do Now?
While there are no simple fixes, there are several ways organizations can respond strategically to this moment.
1. Invest in organizational resilience and smart design. Burnout cannot be solved through wellness initiatives alone. Nonprofits should examine workload, staffing structures, decision-making, and expectations. Sustainability requires building organizations where people can remain effective without operating in constant crisis mode. That may mean lessening programmatic activities, organizations cannot be expected to overextend to combat systemic societal failures.
2. Diversify revenue before it becomes urgent. Organizations that rely heavily on one funding stream are vulnerable. Expanding individual giving, building or strengthening earned revenue where appropriate, and exploring collaborative fundraising partnerships can create more stability over time.
3. Share more, compete less. This is another reason for leaders to “share sugar,” borrow from neighbors instead of struggling alone. Whether through partnerships, shared staffing, collective fundraising, or resource-sharing, nonprofits may need to rethink independence as the default model.
The State of Nonprofits 2026 Report paints a picture that so many leaders and our clients can relate to. It also highlights something we know well: nonprofit leaders are some of the most innovative, resilient, and fiscally savvy people in our world. You just need the tools and resources to thrive.
If you or your organization need support with figuring out how to navigate this challenging time, contact us! We’re here to help make your Purpose Possible!
